Someone will probably flame me for posting this rumor, but it is just too good to pass up. I have been pinging all my contacts and seeing what they have to say about the upcoming Nexus One phone. The device is a relative lock for T-Mobile and I was told documentation already exists that contains the launch date and retail price.

I’m not so concerned with the exact launch date because those kind of things normally get adjusted. What had me the most curious was the actual retail price. If this phone is going to have a 1 GHz Snapdragon processor, we know it will be expensive (just look at the Xperia X10).

There was also the possibility that Google might subsidize the device in order to bring it to as many people as possible.

This leads me to the following tip that came from an anonymous source. Read it and make what you will of it.

1.) It’s going to be $199, subsidized by Google. That is pretty game changing from a cell phone sales perspective. Sounds like Google is going to make a big push to get a good Android handset into as many people’s hands as possible.

2.) They are apparently working on some new 3D UI elements for Android.

3.) GSM at first, CDMA version will follow.Anonymous tipster

It might sound shocking at first, but when you think about it for awhile it becomes more believable.

Verizon Wireless recently launched the Motorola Droid at a subsidized price of $199 in addition to spending $100 million on a marketing campaign. They sold the device at a loss because they know they will recoup their investment on the 2 year contracts and data plans.

Google might also be willing to sell the Nexus One at a loss in order to entrap entice customers. The phone will require a Google account, so Google will be virtually buying new mobile users. And with all the new mobile services that Google offers (including new advertising schemes), you can bet they could easily monetize the device enough to do this.

Does it all sound a bit crazy? I can’t wait for more official information. Look for the T-Mobile docs to leak over the coming weeks.

Taylor is the founder of Android and Me. He resides in Dallas and carries the Samsung Galaxy S 4 and HTC One as his daily devices. Ask him a question on Twitter or Google+ and he is likely to respond. | Ethics statement

So does this mean that I could just buy this phone for $199 and not have to deal with any contract with T-Mobile? If that is the case, wow…that is awesome…I have a Droid, but this would make it possible for me to just grab one of these should the “Google Phone” turn out to be something significantly different from a standard Android phone.

Nah, they’d rather live in the Noka/SE dominated world of old. But whatever, Apple’s reaching saturation point, everyone has one, they’re becoming boring. They’re great, but meh, where do they go to next?

iPhone really needs to innovate with their next model. So far the three releases have been pretty much the same, they just added 3G and then sped it up a bit. My iPhone owning friends were impressed with my Hero, but the Nexus they’re going crazy about.

Must be the lack of firm details and instant massive hype, apple fans go mad for that sh!t.

Yes. They aren’t buying you a handset, they’re buying an entire industry. Think about the xbox. Microsoft wanted to break into the video game industry so they sold their consoles at a loss. This isn’t much different.

Theoretically, they could give everyone in the US age 18-64 $100 towards a phone and still have money left over (about $3b give or take). And I’m talking cash. Realistically they could issue bonds or preferred securities. But if the wanted, they could shell out cold hard cash and buy their way into the cell phone market.

That isn’t a valid comparison. Microsoft can afford to sell their Xbox consoles at a loss because they make their money in games, both ones that their own studios produce and ones produced by companies that pay for the rights to produce Xbox games.

The only thing remotely similar to this is the android market, and Google isn’t making nearly enough off of that to justify subsidizing handsets. Google is first and foremost an advertising company because that’s how they make their money. Everything else they do; gmail, android, chrome, google apps and such; is produced and distributed freely because they help promote advertising to as many people as possible and per unit cost of distribution is near zero since it’s all purely software, so there’s no manufacturing cost or expensive distribution channels.

The same would not be true if Google were to distribute hardware for free or significantly under per unit production cost . If the $199 price tag rumor is true, I think there would have to be some stipulation similar to T-Mobile’s upgrade policy (which, even as an early G1 adopter, I don’t qualify for again until next October), and those that don’t qualify will have to pay a significantly higher cost per unit.

So let’s say i’m on a street corner and I’m hungry. I pull out my google phone, log into my google account, pull up my google maps, then see some google ads that tell me about a restaurant i would enjoy based on my previous eating habits that they’ve been tracking.

I’m going to take a wild guess that there’s a dollar to be made in that scenario…. aside from becoming the microsoft of the handset market, tracking users personal information and spending habits, serving targeted ads, and bridging the gap between the internet and the real world. ;)

You have to devide between the price you pay and the component costs. For example, the production and components of an iPhone cost only about 180$ (http://techcrunchies.com/cost-of-iphone-components/). The difference is Apples profit (ok, the also have to pay for ads or development).
Now to Google: They dont want to make a (big) profit with their sells. So they just sell it at the manufacturing price.
Google wants customers to browse and of course search the web on the go, thats the thing they make money with.

I think it holds some validity. Google is notorious for offering products for “free” or subsidized from an industry that charges ALOT for them (Google Navigation, anyone?).
You make another valid point with needing a Google Account. They are essentially integrating those customers into Google and taking them away from other services.
Like I’ve said before with Google, it’s not what the phone is, it’s what they are trying to do with the mobile phone business.

Looks like I’ll be selling my cliq as I can’t part with my G1 (ok so i’d keep them all). Yes while I love full keyboard I don’t have to much problems with iphone other than its edge and not 3g on tmobile. $199 I can do with no problem as I paid full price for my cliq and mad cause it came with 1.5! Hope they upgrade to 2.0 soon or will sell it. I switched and have the no contract even more plus plan with tmobile.

I don’t agree with your price comparison to the X10. SE has always charged premium prices for their smart phones. Just because SE wants a your next-born for it’s Snapdragon phone, that doesn’t mean HTC and/or Google will. It also doesn’t mean the Snapdragon is the reason for the high price. A couple of logical fallacies there.

As far as Google and T-mobile selling this phone. Perhaps T-mobile will be selling for the subsidized price of $199 and Google will be selling the phone unlocked for a higher price.

I, for one, hope that this phone is the game changer that it’s rumored to be.

Any word on when this will be dropping in uk/europe would be awesome. If it came down to it would it be possible to import it from the us and use it over here? Im not sure how the differering systems work on the networks over there and here.

Many years ago, there was an interactive disc standard called ‘CD-I’. It was a Philps invention. It was hoping to be a consumer and industrial how to, game, and learning platform. It was sophisticated, hard to program and author for, etc. Eventually, CD-ROM generalized platforms won. Not the point though.

The initial boxes were prices at like $1000, then Philips dropped the prices across the board to 499, then 299, then 199. Eventually the platform lost support. I asked a big wig a Philips USA how they lowered the cost to quickly with such low volumes, he said, “we had to price them as if there were 500k units already in the market”.

Google thinks about the long term. They don’t want a world where everyone uses Apple which will have a veto over Google Voice and other google services. They certainly don’t want a resurgence of Microsoft, which would replace Google search with Bing. So they might be subsidizing today for the sake of the future.

Google is moving down in the stack to challenge B2C opponents with an open architecture and new sets of standards. In creating a post-revenue business model, Google can only manage success if consumers accept a co-branding and outsourced manufactured device … NQ Logic recommends reading about the rest of the new Google’s mobile strategy at http://www.nqlogic.com

Since i’ve been slapped in the face by Samsung’s trunk with the Galaxy and have no chance of getting 2.0, if i sold now (while the phone is still worth something) how long dju reckon i’d be waiting for this?

i have bought all the t mobile android phonees.. and hell yea i will pay 500 for this one… with or without 3g.. but guess wat it has 3g… so am about to pre order… this bitch… WOW.. incredible by google

The iPhone only costs $200 to produce per unit. If HTC can make this phone for even $250-$300, Google can more than make up the cost difference in ad revenue and long-term mind-share and market penetration.

This mysterious source was correct about the latter two predictions, it seems. And the first rumor seems like a very reasonable way for Google to go.

$199 would be excellent. Unfortunately the SIM free nexus onw is available for preorder in the UK at the moment. For £599.99 – £649.99 or ~ $940 – $1020. I don’t think that anyone in the UK is going to pay that for a handset. iPhone slayer? Sorry Google, maybe next time.

[...] price of the Nexus One with ad revenue”. Didn’t we all wish? We thought maybe it was true, if AndroidandMe thought it might be viable than why not? They don’t push out any ol’ thing on their site. [...]